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News : Irish Economy Last Updated: Feb 15, 2015 - 6:30 AM

US Chamber's investment data into Ireland misleading; 3,300 jobs added since 2007
By Michael Hennigan, Finfacts founder and editor
Oct 3, 2013 - 2:18 PM

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The US Chamber of Commerce in Ireland has published a promotional brochure [pdf] that has some audacious claims on foreign investment flows into Ireland. The claims are highly misleading and the publication does not merit being termed a 'report' or study' as there is no acknowledgement that massive corporate tax avoidance has any impact on the data. Despite a claim of new investment of $129.5bn in the period 2008-2012, only 3,300 permanent net jobs were added by US firms in Ireland.

In the past half decade, US firms have invested more capital in Ireland than in the previous half century."

That seems impressive but with all that cash, where are the jobs?

Irish Government data shows that full-time permanent jobs in agency-supported foreign firms in 2012 were lower than in 2000 despite a 20% increase in the overall workforce.

IDA Ireland's statistcis show that only 3,300 full-time permanent  jobs were added in American firms.

The chamber says:

  • Over the five-year period starting in 2008 and ending in 2012, US firms invested more capital in Ireland ($129.5bn) than in the previous 58 years combined;
  • The level of investment in Ireland over 2008-2012 was roughly 14 times larger than US investment in China;
  • In 2012, Ireland ranked as the fourth largest recipient of US FDI, garnering almost as much US investment as all of developing Asia. While US investment to Ireland rose marginally last year, by roughly 1%, to $22.8bn, total US investment to the EU declined sharply, by 17.5%;
  • In the first half of 2013, Ireland moved up in the rankings, emerging as the third largest recipient of US FDI. US investment flows to Ireland totalled $15.8bn in the first half of this year, a 32% rise from the same period a year ago;
  • On a historic cost basis, the stock of US investment in Ireland broke the $200bn barrier for the first time in 2012. Corporate America’s FDI stock in Ireland is equal to the US stock in France and Germany combined. What’s more, it is nearly 20% larger than the aggregate US stock in the BRIC nations;
  • Using actual figures—for 2010—US foreign affiliate sales in Ireland—with a population of  4.5m and a GDP of just $210bn—were greater than affiliate sales in China ($170bn) and Japan ($247bn);

  • Ireland now ranks the number one export platform in the world for US affiliates based on the latest available data, underscoring the importance of Ireland in the global value chains of US firms.

This is at fantasy level where the data  presented results from distortions caused by tax avoidance.

There is no reference to data, which shows that in 2010, 98,500 Irish workers accounted for more sales than 598,000 in Germany ($324bn compared with $317bn) and German majority affiliates of US firms could only manage a net income/revenue ratio of 3% compared with 30% in Ireland.

'Reinvested earnings' are treated as an 'inflow' but again this can be cash that is technically held outside the US to avoid federal taxes but in reality may be in the US.

The data here without context is for the gullible.

Ireland stock of outward investment is bigger than the stock of inward investment but again this is not to be taken seriously

There are huge flows through what Apple calls non-tax resident 'stateless Irish companies; Google diverted 41% of its global revenues to Ireland in 2012 -- a rise in value of 25% compared with  2011. Microsoft diverted 24% of global revenues to Ireland in 2011/12 -- a rise in value of 37%.

Intel, the chip giant, has about 2,500 employed at its Leixlip campus, a fact it confirmed to Finfacts in recent months.

The US Chamber's brochure says 4,500 work on the campus.

It has services such as canteens, security and some other contract staff but it wouldn't confirm that this number is as many as 2,000. 

Check these two Finfacts reports:

US company profits per Irish employee at $970,000; Tax paid in Ireland at $25,000 - - data here is from net income, employees and revenues supplied by companies to the US government and tax data is from IDA Ireland.

Ireland's confusing FDI data in age of spin - - this has an analysis on 2011 FDI data.

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